Millionaire brothers who were sued over “missing” equipment at the company they once owned have agreed to hand back £2million – and could now lose their new venture should they fail to pay up.
Calum and Stuart Melville were taken to court, with a supply firm Meapac, after bosses at Cosalt Offshore claimed it was the victim of a multimillion-pound fraud. Now it has emerged the two – who once ranked among Scotland’s 100 richest men – will hand over £1million with immediate effect.
The pair said last night they were not admitting liability, but had “strong business reasons” to settle. They will also pay back another £1million in instalments over 18 months.
If they fail to make the payments they will have to give up their new firm, Global Integrated Services – a direct rival to Cosalt.
Both sides met at the Court of Session to thrash out final terms of a deal. All parties have now agreed terms, but need another week for the formalities.
The battle centred on claims made by Cosalt Offshore – which traded as GTC Group until the brothers sold the firm in 2007 – that equipment worth millions was missing from its Aberdeen arm.
The firm alleged there may have been a fraud involving payments to Meapac for goods never delivered, proceeds of which would end up in accounts controlled by the Melvilles. Last week Lord Hodge granted a decree in favour of Cosalt against Meapac totalling £2.5million – plus interest and expenses.
Cosalt confirmed in an announcement to the stock market yesterday that the bulk of the money will come from the Melvilles.
Cosalt had also mounted a £1million defamation action against Calum Melville, which will be dropped under the deal.
The brothers said they were “pleased” to settle the matter.
“The offer of £2million was made without any admission of liability and covers what we understand to be the majority of Cosalt’s legal and professional fees in pursuing the actions,” they said.
“We would have welcomed the opportunity to have resolved this matter in court, but there were very strong business reasons for settling, including the re-banking of several of our business interests.
“This would have proven extremely challenging if the actions had remained live. We also wanted to avoid having to divert extensive management time to the conduct of the actions.
“Our focus is now on continuing to grow Global Integrated Services into the premier provider of mechanical handling services to the energy sector globally.”
They added that they hoped Cosalt would now “allow a line to be drawn under this matter once and for all”.
The case is expected to call for a final time at the Court of Session on Tuesday for the agreement to be signed off.